SEBI extends deadline for June quarter results amid COVID-19

Companies to manage the dual requirement of holding board meetings and submission of financial results

Shaifali Sharma
Vinod Kothari & Company
corplaw@vinodkothari.com

In the wake of the continuing impact of COVID-19 pandemic, SEBI vide circular[1] dated June 24, 2020, granted relaxation to listed entities and extended the timeline for submission of financial results for quarter / half year / financial year ended March 31, 2020 to July 31, 2020.

Since, now the first quarter of the FY 2020-21 has come to an end, companies are expected to finalize, approve and submit their financials to the respective stock exchange(s) within 45 days from the quarter ended June 30, 2020 as per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) i.e. on or before August 14, 2020.

Considering the shortened time gap of 14 days between the two due dates stated above i.e. July 31 and August 14, SEBI vide its circular[2] dated July 29, 2020, has extended the deadline to submit financial results for the first quarter from August 14 to September 15, 2020 thereby allowing additional 32 days to the listed companies which will in turn provide extra time to companies and its auditors working on reporting the quarterly financial results.

It is pertinent to note here that the board of directors, as per Regulation 17(2) of the Listing Regulations, must meet at least four times a year, with a maximum time gap of 120 days between any two meetings. In this regard, the SEBI vide circular[3] date June 26, 2020 had exempted the listed entities from observing the stipulated time gap between two board meetings for the meetings held/proposed to be held between the period December 01, 2019 and July 31, 2020.

Considering no further extension has been granted by SEBI yet, the board meeting for approving the financial results should be scheduled keeping in mind the maximum time gap of 120 days prescribed under the Listing Regulations. For example, if we take a case of a listed company which held its last board meeting on May 02, 2020, the next board meeting shall be scheduled on or before August 31, 2020  instead of the extended due date of September 14, 2020.

As regards for unlisted companies, the maximum time gap for conducting board meetings had been relaxed vide MCA circular[4] dated March 24, 2020 to 180 days from present 120 days for the first two quarters of FY 2020-2021.

[1] https://www.sebi.gov.in/legal/circulars/jun-2020/further-extension-of-time-for-submission-of-financial-results-for-the-quarter-half-year-financial-year-ending-31st-march-2020-due-to-the-continuing-impact-of-the-covid-19-pandemic_46924.html

[2] https://www.sebi.gov.in/legal/regulations/jun-2009/securities-and-exchange-board-of-india-delisting-of-equity-shares-regulations-2009-last-amended-on-april-17-2020-_34625.html

[3] https://www.sebi.gov.in/legal/circulars/jun-2020/relaxation-of-time-gap-between-two-board-audit-committee-meetings-of-listed-entities-owing-to-the-covid-19-pandemic_46945.html

[4] http://www.mca.gov.in/Ministry/pdf/Circular_25032020.pdf


Other reading materials on the similar topic:

  1. ‘COVID-19 – Incorporated Responses | Regulatory measures in view of COVID-19’ can be viewed here
  2. ‘Resources on virtual AGMs’ can be viewed here
  3. Our other articles on various topics can be read at: http://vinodkothari.com/

Email id for further queries: corplaw@vinodkotahri.com

Our website: www.vinodkothari.com

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Listed company disclosures of impact of the Covid Crisis: Learning from global experience

Munmi Phukon & Ambika Mehrotra

corplaw@vinodkothari.com

Introduction

The Securities and Exchange Board of India (SEBI) has issued an Advisory on 20th May, 2020[1] for listed entities  advising them to evaluate the impact of the COVID 19 pandemic on their business and disseminate the same to stock exchanges.

Read more

SEBI’s relaxation inspired by MCA circulars

Link to the circular (12.05.2020)

Restructuring of bonds during COVID-19 crisis

This presentation covers the procedural requirements for restructuring of bonds/debentures during COVID-19 crisis.

Please click below for the presentation:

Part-1:

Please click here for the PPT used in the presentation.

 

Highlights of SEBI’s temporary relaxations for Rights Issue

Ambika Mehrotra & Ankit Vashishth

corplaw@vinodkothari.com

In line with various other relaxations introduced by the Securities and Exchange Board of India (‘SEBI’), amid the global pandemic, it has now come up with a Circular dated 21st April, 2020 [1]granting temporary relief under certain provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR regulations’) in respect of Rights Issue. The rights issues opening on or before March 31, 2021 will get benefited from the said Circular.

It goes without saying that during the period of this of economical breakdown, the industrial undertakings are in need of funds for various purposes. In this hour of crisis, SEBI’s move seems to ease out the stringent requirements in the statues which hamper the facility of raising funds by companies especially through rights issue.

The amended provisions broadly serve the intent of having a relatively flexible eligibility criteria for a fast track rights issue and lesser chances of refund of the amount in case of non- receipt of subscription amount.

A snapshot of the relaxations and their impact is enlisted below: –

Eligibility conditions related to Fast Track Rights Issues

Relevant Regulation

 

Pre- amendment Post-amendment Impact Analysis
99(a) the equity shares of the issuer have been listed on any stock exchange for a period of at least three years immediately preceding the reference date

 

the equity shares of the issuer have been listed on any stock exchange for a period of at least eighteen months immediately preceding the reference date

 

Relaxation in the pre-condition with respect to listing of equity shares from 3 years to 18 months.
99(c ) the average market capitalisation of public shareholding of the issuer is at least two hundred and fifty crore rupees

 

the average market capitalisation of public shareholding of the issuer is at least one hundred crores

 

Companies with smaller market size i.e. more Rs. 100 crore and above also permitted to enter into Fast Track Issue.
99(f) and its proviso the issuer has been in compliance with the equity listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, for a period of at least three years immediately preceding the reference date:

 

Provided that if the issuer has not complied with the provisions of the listing agrîment or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, relating to composition of board of directors, for any quarter during the last three years immediately preceding the reference date, but is compliant with such provisions at the time of filing of letter of offer, and adequate disclosures are made in the letter of offer about such non-compliances during the three years immediately preceding the reference date, it shall be deemed as compliance with the condition;

the issuer has been in compliance with the equity listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, for a period of at least eighteen months immediately preceding the reference date:

 

Provided that if the issuer has not complied with the provisions of the listing agreement or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, relating to composition of board of directors, for any quarter during the last eighteen months immediately preceding the reference date, but is compliant with such provisions at the time of filing of letter of offer, and adequate disclosures are made in the letter of offer about such non-compliances during the three years immediately preceding the reference date, it shall be deemed as compliance with the condition;

 

The timeline for being in compliance with listing regulations has been reduced from 3 years to 18 months.

 

This is in line with the requirement under Regulation 99(a) wrt listing of equity shares for a period of atleast 18 months instead of 3 years.

99(h) No show-cause notices have been issued or prosecution proceedings have been initiated by the SEBI and pending against the issuer or its promoters or whole-time directors as on the reference date. No show-cause notices, excluding under adjudication proceedings, have been issued by the SEBI and pending against the issuer or its promoters or whole-time directors as on the reference date.

 

In cases where against the issuer or its promoters/ directors/ group companies,

 

i.     a show cause notice(s) has been issued by the Board in an adjudication proceeding or

 

ii.   prosecution proceedings have been initiated by the Board;

necessary disclosures in respect of such action (s) along-with its potential adverse impact on the issuer shall be made in the letter of offer.

Regulation 99(h) restricts the company to make fast track rights issue in case there had been any show-cause notices or prosecution proceedings issued/initiated against the company/ its promoters/ WTDs.

 

The temporary relaxation however allows the company to be eligible for rights issue to the extent where adjudication proceedings or prosecution proceedings in respect of the above as well as the group companies are concerned, on making the required disclosures in this regard and its adverse impact, in the letter of offer

99(i) the issuer or promoter or promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during three years immediately preceding the reference date;

 

 

 

The issuer or promoter or promoter group or director of the issuer has fulfilled the settlement terms or adhered to directions of the settlement order(s) in cases where it has settled any alleged violation of securities laws through the consent or settlement mechanism with the Board. Prior to the relaxation, any violation in the securities laws by the issuer/ promoter/ promoter group/ director made the issuer ineligible. This however has now been relaxed to permit the issue in case the above violators, having violated the securities laws at anytime during the past have fulfilled the settlement terms or followed the directions under the settlement order(s)
99(j) The equity shares of the issuer have not been suspended from trading as a disciplinary measure during last 3 years immediately preceding the reference date. The equity shares of the issuer have not been suspended from trading as a disciplinary measure during last 18 months immediately preceding the reference date. In line with Regulation 99(a) and (f)
99(m) There are no audit qualifications on the audited accounts of the issuer in respect of those financial years for which such accounts are disclosed in the letter of offer For audit qualifications, if any, in respect of any of the financial years for which accounts are disclosed in the letter of offer, the issuer shall provide the restated financial statements adjusting for the impact of the audit qualifications.

 

Further, that for the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the letter of offer.

Prior to the Circular, any qualification in the audit report led to ineligibility. This condition has now been re-framed to make the companies eligible on providing the restated financial statements adjusting for the impact of the audit qualifications or providing clarifications in case such impact cannot be ascertained

Relaxation with respect to Minimum Subscription:

Relevant Regulation

 

Pre- amendment Post-amendment Remarks
86(1) The minimum subscription to be received in the issue shall be at least ninety per cent. of the offer through the offer document. The minimum subscription to be received in the issue shall be at least seventy five percent of the offer through the offer document.

 

Provided that if the issue is subscribed between 75% to 90%, issue will be considered successful subject to the condition that out of the funds raised atleast 75% of the issue size shall be utilized for the objects of the issue other than general corporate purpose.

The minimum subscription amount has been reduced from 90% to 75%.

However, the Circular seems to put another restriction on the utilization of atleast 75% of the funds for the objects of the issue other than general corporate purpose if the actual subscription goes beyond 75% but within 90% of the offer.

Minimum threshold for not filing draft letter of offer

Relevant Regulation

 

Pre- amendment Post-amendment Remarks
Applicability of the Regulations:

 

3(b)

rights issue by a listed issuer; where the aggregate value of the issue is ten crore rupees or more;

 

rights issue by a listed issuer; where the aggregate value of the issue is twenty-five crores or more;

 

The conditions prescribed in Chapter III of ICDR Regulations shall not apply in case of Rights Issue carrying an issue size of less than Rs. 25 crores.
 

 

Proviso to Reg. 3

Provided that in case of rights issue of size less than ten crore rupees, the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the Board for information and dissemination on the Board’s website. Provided that in case of rights issue of size less than twenty-five crore rupees, the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the Board for information and dissemination on the Board’s website. The change is made considering the revised limit of applicability of the Regulations for a rights issue.
 

 

 

 

60

Unless otherwise provided in this Chapter, an issuer offering specified securities of aggregate value of ten crore rupees or more, through a rights issue shall satisfy the conditions of this Chapter Unless otherwise provided in this Chapter, an issuer offering specified securities of aggregate value twenty-five crore rupees or more, through a rights issue shall satisfy the conditions of this Chapter. The change is made considering the revised limit of applicability of the Regulations for a rights issue.

One-time Relaxation on opening of issue

In addition to the above Circular, SEBI has also issued another circular on the same date i.e. April 21, 2019[2] for granting one-time relaxation on the basis of the representations received from various stakeholders with respect to the opening of issue period within 12 months from the date of issuance of the observations by SEBI, for an Initial Public Offer (IPO), Further Public Offer (FPO) or Rights Issue as per Regulation 44, 140 and 85 respectively of the ICDR Regulations, expiring during this period of lockdown i.e. between March 1, 2020 and September 30, 2020 to be extended by 6 months, from the date of expiry of the above-mentioned observations received from SEBI.

However, the extension to this issue opening period shall be granted on obtaining an undertaking from lead manager of the issue confirming compliance with Schedule XVI of the ICDR Regulations with respect to the nature of changes in the offer document which require filing of updated offer document, while submitting the updated offer document to SEBI.

Conclusion

These temporary relaxations will surely bring in a sigh of relief for the stakeholders including the companies intending to raise funds through rights issue, during this interim period of disruption due the outbreak of COVID-19, considering the stagnancy of operations in the country.

Read our related articles below –

SEBI ICDR Regulations, 2018– Snapshot on changes in rights, bonus, QIP and preferential issue;

Key amendments in relation to Rights, Bonus, QIP and Preferential Issue under SEBI (ICDR) Regulations, 2018;

SEBI (ICDR) Regulations, 2018-Key Amendments;

Covid-19 – Incorporated Responses | Regulatory measures in view of COVID-19.

[1] https://www.sebi.gov.in/legal/circulars/apr-2020/relaxations-from-certain-provisions-of-the-sebi-issue-of-capital-and-disclosure-requirements-regulations-2018-in-respect-of-rights-issue_46537.html

[2] https://www.sebi.gov.in/legal/circulars/apr-2020/one-time-relaxation-with-respect-to-validity-of-sebi-observations_46536.html

Slew of measures from SEBI in response to COVID-19

List of reliefs summarized

Shaifali Sharma

corplaw@vinodkothari.com

While ensuring that companies remain compliant during the current battle with COVID-19, several temporary measures are being provided by various regulators every other day since lockdown. The measures announced would support companies and other industrial bodies to function and meet the timelines in the period of lockdown.

The Capital Market Regulator SEBI has also lined up a slew of relaxations for the listed entities amid COVID-19 crises. The list of all the relevant circulars in this regard, recapitulating the requirement of law, original timelines and the relaxations granted by the SEBI are summarized in this article, pertaining to the following Regulations:

  1. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
  2. SEBI SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
  3. SEBI (Depository and Participants) Regulations, 2018
  4. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
  5. SEBI (Buy-back of Securities) Regulations, 2018

I. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015[1]

Sr.

No.

Regulation /Circular Particulars Requirement/Frequency of filing Original Due Date Extended Date Relaxation period
Relaxations on holding AGM by top 100 listed entities vide circular dated April 23, 2020
1 44(5) Holding AGM within a period of five months Top 100 listed entities by market capitalization, (determined as on 31st March of every FY), shall hold their AGMs within a period of 5 months from the date of closing of the FY For companies whose FY ends on March 31, 2020 –  31-Aug-20 30-Sep-20 1 month
For companies whose FY ends on December 31, 2020 – 31-May-20 30-Sep-20 4 months
Relaxations/Clarification vide circular dated April 17, 2020
2 29(2) Prior Intimations Prior intimation about meetings of the board (excluding the date of the intimation and date of the meeting):
a. at least 5 days before the meeting if financial results are to be considered;
b. 2 working days in other cases
Prior intimation of 5 days / 2 working days reduced to 2 days, for board meetings held till July 31, 2020
3 39(3) Intimation to Stock Exchanges regarding loss of share certificates and issue of the duplicate certificates Within 2 days of its getting information Any delay beyond the stipulated time will not attract penal provisions laid down vide SEBI circular dated May 03, 2018 wrt Non-Compliance with provisions of SEBI LODR Relaxation is for intimations to be made between March 1, 2020 to May 31, 2020
4 52(8) Newspaper publication of financial results Within 2 calendar days of the conclusion of the meeting of the board of directors No advertisement publication in newspaper required for events taking place up to May 15, 2020
5 Clarification regarding the use of digital signatures Authentication /certification of any filing /submission made to stock exchanges under LODR may be done using digital signature certifications until June 30, 2020
Relaxations vide SEBI circular dated March 26, 2020
6 40(9) Certificate from Practicing Company Secretary on timely issue of share certificates. Half Yearly(1 month of the end of each half of the financial year) 30-Apr-20 31-May-20 1 month
7 44(5) Holding of AGM by top 100 listed entities by market capitalization for FY 19-20. Annual (Within a period of 5 months from the date of closing of the financial year) 31-Aug-20 30-Sep-20 1 month
8 19(3A) The Nomination and Remuneration Committee shall meet at least once in a year. Yearly 31-Mar-20 30-Jun-20 3 months
9 20(3A) The Stakeholders’ Relationship Committee shall meet at least once in a year.
10 21(3A) The Risk Management Committee shall meet at least once in a year.
11 SEBI circular dated January 22, 2020 Relaxation of the operation of the SEBI circular on Standard Operating Procedure dated January 22, 2020 For compliance periods ending on or after March 31, 2020. For compliance periods ending on or after June 30, 2020. 3 months
12 47 Publication of advertisements in the newspaper.

Exemption from publication of advertisements in newspapers as required under regulation 47 for all events scheduled till May 15, 2020.

As provided under Regulation 47 No advertisement publication in newspaper required for events taking place up to May 15, 2020
Relaxations vide SEBI circular dated March 23, 2020
13 SEBI circular dated October 29, 2013, October 22, 2019 and December 24, 2019 Public issue of debt securities/ preference shares or listing of commercial papers Companies proposing public issue of debt securities/ preference shares or listing of commercial papers are required to submit audited financial statements which are not older than 6 months.

Relaxation -Companies can issue debt securities or preference shares/ list commercial papers based on the financials as on September 30, 2019 up to the extended date.

31-Mar-20 31-May-20 60 days
14 SEBI circular dated 26.11.2018 Disclosure of Large Corporate entities

a. Initial disclosure

Initial Disclosure – within 30 days from the beginning of financial year 30-Apr-20 30-Jun-20 45 days
b. Annual disclosure Annual Disclosure – within 45 days from the end of financial year 15-May-20 30-Jun-20 60 days
15 52 (1) & (2)

Financial results

Submission of financial results in case of listed commercial papers.

Half yearly – 45 days from the end of half year 15-May-20 30-Jun-20 45 days
Annual – 60 days from the end of financial year for annual financial statements 30-May-20 30-Jun-20 30 days
Relaxation from compliance with certain provisions of SEBI (LODR) Regulations, 2015
16 7(3) Compliance certificate on share transfer facility Half yearly (one month of end of each half of the financial year) 30-Apr-20 31-May-20 1 month
17 13(3) Statement of investor complaints Quarterly (21 days from the end of each quarter) 21-Apr-20 15-May-20 3 weeks (approx)
18 24A read with circular dated February 8, 2019 Annual Secretarial Compliance Report Yearly (60 days from the end of financial year) 30-May-20 30-Jun-20 1 month
19 27(2) Corporate Governance Report Quarterly (15 days from the end of the quarter) 15-Apr-20 15-May-20 1 month
20 31 Shareholding pattern Quarterly (21 days from the end of the quarter) 21-Apr-20 15-May-20 3 weeks (approx)
21 33 Financial results 45 days from the end of the quarter for quarterly results 15-May-20 30-Jun-20 45 days
60 days from the end of Financial Year for Annual Financial Results 30-May-20 30-Jun-20 1 month
22 17(2) & 18(2)(a) Meeting of Board of Directors and Audit Committee Board of Directors and Audit Committee shall meet at least 4 times in a year and not more than 120 days shall elapse between two meetings. The board of directors and Audit Committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020

II. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011[2]

Sr. No. Regulation Particulars Requirement/Frequency of filing Original Due Date Extended Date Relaxation period
Relaxation from compliance with certain provisions of SEBI (SAST) Regulations, 2011 vide circular dated March 27, 2020
1 30(1) & 30(2) Continual Disclosures Every person, who together with persons acting in concert with him, holds shares /voting rights entitling him to exercise 25% or more of the voting rights in a target company, shall disclose their aggregate shareholding and voting rights as of the 31st March, in such target company in such form as may be specified. Within 7 working days from the end of the financial year March 31, 2020. 1-Jun-20 3 months (approx)
 2 31(4) Disclosure of encumbered shares Promoter of every target company shall together with persons acting in concert with him, disclose their aggregate shareholding and voting rights as of the 31st March, in such target company in such form as may be specified

III. SEBI (Depository and Participants) Regulations, 2018[3]

Sr.

No.

Regulation Particulars Requirement/Frequency of filing Original Due Date Extended Date Relaxation period
Relaxation in time period for certain activities carried out by depository participants, RTAs / issuers, KRAs, stock brokers vide circular dated April 16, 2020
1 74(5) of SEBI (Depositories and Participants) Regulation, 2018 Processing of the demat  request form by Issuer/ RTA Submission of certificate with Depository and stock exchange where securities are listed for following:

a. Confirming that the certificate of security received from the DP in the course of processing a dematerialization request of a beneficial owner have been listed on the stock exchange where the earlier issued securities are listed; and

b. To the effect that the Company has, after due verification immediately mutilated and canceled the certificate of security and substituted in its record the name of the Depository as the registered owner.

Within 15 days of receipt of information from participant Period beginning from March 23, 2020 till May 17, 2020 shall be excluded for computing the existing timelines

Further, 15 day time period after May 17, 2020 is allowed to the SEBI registered intermediary, to clear the back log.

2 74(5) of SEBI (Depositories and Participants) Regulation, 2018 Processing of the demat request form by the Participants. The participant shall furnish to the issuer details specified in sub-regulation (2) of Regulation 74 along with the certificate of security Within 7 days of the receipt of certificate of security
3 SEBI  circular  no.  MIRSD/Cir-26/2011  dated  December  23, 2011 Uploading KYC application form and supporting documents on KRA system KYC application form and supporting documents of the clients to be uploaded on system of KRA within 10 working days Within 10 working days
Relaxation in adherence to prescribed timelines relating to SEBI (Depositories and Participants) Regulation, 2018 vide circular dated April 13, 2020
4 74(5) of SEBI (Depositories and Participants) Regulation, 2018 Submission of certificate with Depository and stock exchange Submission of certificate with Depository and stock exchange where securities are listed for following:

a. Confirming that the certificate of security received from the DP in the course of processing a dematerialization request of a beneficial owner have been listed on the stock exchange where the earlier issued securities are listed; and

b. To the effect that the Company has, after due verification immediately mutilated and canceled the certificate of security and substituted in its record the name of the Depository as the registered owner.

Within 15 days of receipt of information from participant Within 15+21+19 days of receipt of information from participant i.e. within 55 days 40 days
5 76(1) of SEBI (Depositories and Participants) Regulation, 2018 Submission of audit report to stock exchange Submission of audit report to stock exchange for the purpose of reconciliation of total issued capital, listed capital and capital held by depositories in demat form within 30 days of the end of each quarter 30-Apr-20 10-Jun-20 40 days
(21+19 days)
6 76(3) of SEBI (Depositories and Participants) Regulation, 2018 Intimation of any difference observed in its issued, listed, and the capital held in demat The company to bring to the notice of the Depositories and the Stock Exchanges, any difference observed in its issued, listed, and the capital held by the depositories in dematerialised form. Immediately within 21 + 19 days i.e. within 40 days 40 days
BSE circular dated April 14, 2020 for extension of Submission Date of Share Capital Audit Report for the quarter ended March 31, 2020
7 76(1) of SEBI (Depositories and Participants) Regulation, 2018 Submission of audit report to stock exchange Submission of audit report to stock exchange for the purpose of reconciliation of total issued capital, listed capital and capital held by depositories in demat form within 30 days of the end of each quarter 30-Apr-20 31-May-20 31 days

IV. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009[4]

Sr. No. ICDR Regulation Particulars Requirement/Frequency of filing Relaxation granted Relaxation period
One-time relaxation with respect to validity of SEBI observations vide circular dated April 21, 2020
1 44(1) Opening of issue in case of IPO Within 12 months from the date of issuance of the observations by the Board

 

Where the SEBI observations have expired/will expire between March 1, 2020 and September 30, 2020, its validty is extended by  6  months,  from  the  date  of  expiry  of  such  observation, subject to an undertaking from lead manager of the issue confirming compliance with Schedule XVI of the ICDR Regulations 6 months
2 85 Opening of issue in case of Right Issue Within 12  months from the date of issuance of the observations

In case of a fast track issue, within 12 months from the record date.

3 140 Opening of issue in case of FPO Within 12 months from the date of issuance of the observations by the Board

In case of a fast track issue, within the period stipulated under the Companies Act, 2013.

In case of shelf prospectus, within 3 months of issuance of observations

4 Schedule XVI Filing fresh offer document for increase/decrease in fresh issue size In case of fresh issue any increase/decrease in estimated issue size by more than 20% of the estimated issue size requires fresh filing of offer document For IPO/ Rights Issues/ FPO opening before 31.12.2020, issuer shall be permitted to increase/decrease the fresh issue size up to 50% of the estimated issue size without requiring to file fresh draft offer document subject to following conditions:

 

·         there has been no change in the objects of the issue

·         the lead manager undertakes that the  draft offer document is in compliance with provisions of Reg 7(1)(e)

·         the lead manager shall ensure that all appropriate changes are made to the  relevant section of DRHP and an  addendum, in this regard, shall be made public.

Relaxation from certain provisions of ICDR in respect of right issue vide circular dated April 21, 2020
Applicable for Right Issues open on or before 31.03.2021 (not applicable for issuance of warrants)
5 99(1)(a) Eligibility conditions related to Fast Track Rights Issue Equity shares of the issuer have been listed on any stock exchange for a period of at least 3 years immediately preceding the reference date Period relaxed from ‘3 years’ to ‘18 months’
6 99(1)(c) Average market capitalisation of public shareholding of the issuer is at least Rs. 250 crores Limit reduced from ‘Rs. 250 crores’ to ‘Rs. 100 crores’
7 99(1)(f) Issuer has been in compliance with the equity listing agreement or LODR Regulations for a period of at least 3 years immediately preceding the reference date

 

Period relaxed from ‘3 years’ to ‘18 months’
8 99(1)(h) No show-cause notices issued or prosecution proceedings initiated and pending against the issuer/ its promoters/ whole-time directors as on the reference date Issuer is eligible even if any adjudication proceedings initiated/pending against the issuer/ its promoters/ whole-time directors.  However, in case a SCN issued or prosecution proceeding initiated against issuer  or  its  promoters/  directors/group companies, necessary disclosures in respect of such action(s) along-with its potential adverse impact on the issuer shall be made in the letter of offer.

 

 

9 99(1)(i) Issuer or promoter or promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during 3 years immediately preceding the reference date

 

In case settled  any  alleged  violation  of  securities  laws, issuer is eligible if issuer/promoter/promoter group/ director of the issuer fulfill the  settlement  terms  or  adhered  to directions  of  the  settlement  order(s)

 

10 99(1)(j) Equity shares of the issuer have not been suspended from trading as a disciplinary measure during last 3 years immediately preceding the reference date

 

Period relaxed from ‘3 years’ to ‘18 months’
11 99(1)(m) There are no audit qualifications on the audited accounts of the issuer w.r.t financial years for which such accounts are disclosed in the letter of offer

 

If there are any audit qualifications, issuer is eligible if:

·         Issuer provide the restated  financial  statements adjusting for the impact of the audit qualifications

·         or the qualifications wherein impact on the financials cannot be  ascertained  the  same  shall  be  disclosed  appropriately  in  the  letter of offer

 

12 86 Minimum Subscription for Right Issue Minimum subscription to be received shall be at least 90% of the offer through the offer document Minimum subscription percentage reduced from 90% to 75% and if the issue is subscribed between 75% to 90%, issue will be considered successful subject to the condition that out of the funds raised atleast 75% of the issue size shall be utilized for the objects of the issue other than general corporate purpose

 

13 3(b), proviso to Reg 3, Reg 60(1) Minimum threshold  required for  not  filing  draft letter of offer with SEBI

 

ICDR Regulations shall apply to right issue by listed issuer where the aggregate value of the issue is Rs. 10 crore or more

 

ICDR Regulations will become applicable where the aggregate value of the issue is Rs. 25 crore or more instead of Rs. 10 crores.

V. SEBI (Buy-back of Securities) Regulations, 2018[5]

Sr. No. Regulation Particulars Requirement/Frequency of filing Relaxation granted Relaxation period
Relaxation in the SEBI (Buy-back of Securities) Regulations, 2018 vide circular dated April 23, 2020
 1  24(i)(f) Obligation of the company for buy-back procedure The company shall not raise further capital for a period of 1 year from the expiry  of  buyback period, except in discharge of its subsisting obligations

 

Period of restriction relaxed by reducing term of ‘1 year’ to ‘6 months’.

 

Relaxation applicable till 31.12.2020

 6 months

 

[1] https://www.sebi.gov.in/legal/regulations/jan-2020/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-regulations-2015-last-amended-on-january-10-2020-_37269.html

[2] https://www.sebi.gov.in/legal/regulations/apr-2019/securities-and-exchange-board-of-india-substantial-acquisition-of-shares-and-takeovers-regulations-2011-last-amended-on-july-29-2019-_40714.html

[3] https://www.sebi.gov.in/legal/regulations/feb-2020/securities-and-exchange-board-of-india-depositories-and-participants-regulations-2018-last-amended-on-february-21-2020-_40622.html

[4] https://www.sebi.gov.in/legal/regulations/jun-2018/securities-and-exchange-board-of-india-issue-of-capital-and-disclosure-requirements-regulations-2009-last-amended-on-february-12-2018-_39242.html

[5] https://www.sebi.gov.in/legal/regulations/jul-2019/securities-and-exchange-board-of-india-buy-back-of-securities-regulations-2018-last-amended-on-july-29-2019-_40327.html

Relaxation i.r.o investor related services due to COVID-19

corplaw@vinodkothari.com

Below is a brief snippet of the relaxations provided by SEBI in the wake of the COVID-19 outbreak.

Click here for the Circular dated 13th April, 2020.

Relaxation from continual disclosures under SAST

Vinod Kothari & Company

corplaw@vinodkothari.com

 

 

 

Further relaxations by SEBI due to Covid-19– third in a row!

Vinod Kothari & Company

corplaw@vinodkothari.com

 

 

 

SEBI relaxes timelines at the time of disruption caused by COVID-19

Vinod Kothari & Company

corplaw@vinodkothari.com

Below is a short snippet of the relaxed timelines issued by the securities market regulator in the wake of the disruption caused by COVID-19.